24450-RU Russian Federation ChiNd The Case of Russia · 2016. 8. 30. · skilled human capital is crucial for Russia's future economic and social development-humans are its most precious

Report No. 24450-RU

Russian FederationChiNd Welfare Outcomes During the 1 990s:The Case of Russia(In Two Volumes) Volume l: Executive SummaryNovember, 2002

Human Development Sector UnitEurope and Central Asia Region

Document of the World BankA=sSt1~~no'g3aB

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ABBREVIATIONS

RF - Russian FederationMLSD - Ministry of Labor and Social DevelopmentMOE - Ministry of EducationMOH - Ministry of HealthMOF - Ministry of FinanceRLMS - Russia Longitudinal Monitoring SurveyHH - householdIMR - infant mortality rateWHO -World Health OrganizationMMR - matemal mortality ratePPE - preprimary educationPE - primary educationLSE - lower secondary educationFSE - full secondary educationTE - tertiary education.GDP - Gross Domestic ProductECA - Europe and Central AsiaSWSCS - Social work and social care servicesNGOs - non-govemmental organizationsMHI - mandatory health insuranceCIS - Commonwealth of Independent StatesCRC - The Convention on the Rights of the ChildUN - United NationsPMPC - Psycho-Medico-Pedagogical CommissionsMDRI - Mental Disability Rights International

Vice President: Johannes F. LinnCountry Director: Julian F. Schweitzer

Sector Director: Annette DixonTask Team Leader: Aleksandra Posarac

Child Welfare Outcomes during the 1990s: The Case of Russia-Executive Summary

The report was prepared by Aleksandra Posarac (team leader) and Mansoora Rashidfrom Europe and Central Asia Sector for Human Development (ECSHD).Consultants, Christian Bodewig, Lilia Ovcharova, and Anna Ivanova collectedbackground information. Many others contributed to the report: Annette Dixon,Michal Rutkowski, Maureen Lewis, Anasstassia Alexandrova, Andrei Markov, andElena Zotova (ECSHD); Julian Schweitzer, a country director for Russia, MichaelCarter, former country director for Russia, Agnieszka Grudzinska, county programcoordinator for Russia; Olga Remenets (UNICEF Office in Moscow); and MarinaGordeeva and Elena Kupriyanova (The Ministry of Labor and Social Development-MLSD-of the Russian Federation). Peer-reviewers, Rosemary McCreery (UNICEFOffice in Moscow), Judita Reichenberg (UNICEF Geneva Office), Adrain Guth (childwelfare expert), and John Innes, Hjalte Sederlof, and Louise Fox (The World Bank)provided valuable comments and suggestions.

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TABLE OF CONTENTS

Abbreviations .................................................... 2Why focus on child welfare? .................................................... 5The objective, purpose, and audience of this study ................................... ................. 5The structure of the study .................................................... 6Child welfare in russia during the transition: the situation and trends ................................. 7

(i) Poverty .................................................... 7(ii) Health and nutrition .................................................... 8(iii) Education .................................................... 10

Factors affecting child welfare in the 1 990s .................................................... 13Social risk management policies over the 1990s .................................................... 14Toward cost-effective and affordable family and child welfare policies ............. .............. 16Potential financial impact of the reform .................................................... 21Building the knowledge base for policy making: data and research agenda ...................... 22

ANNEX I .................................................... 23

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Introduction

This study looks at child' welfare developments in Russia during the 1990s.Children represent future human capital, which has long been identified as one of the keydeterminants not only of individual welfare but also of overall socioeconomic growth anddevelopment. Like in any other country in the world, developing highly educated andskilled human capital is crucial for Russia's future economic and social development-humans are its most precious resource.

The 1990s brought about sweeping changes in Russia's political, social, andeconomic landscape. Many new, exciting opportunities arose. At the same time, the deepand prolonged economic decline and rapid social change weakened the capacity ofRussian families and individuals to manage risks, as well as the capacity of the state toprovide meaningful support. As a result, the well-being of Russian children hasdeteriorated. This deterioration, if not addressed, will likely lead to human capital loss,increased social costs, and ultimately economic performance that falls short of thecountry's potential.

WHY FOCUS ON CHILD WELFARE?

Child welfare is at the core of the World Bank's mission to prevent and combatpoverty. Investing in the well-being of children allows them to acquire human capital thatwill reduce their chances of ending up as adults who become a burden on society.Families with children face a higher risk of being poor. Poor children are ofteninadequately fed; they have less access to health, education, and other social services; andare disproportionately subject to neglect, abuse, or abandonment. Ultimately they are athigher risk of having to enter the labor force with insufficient knowledge and skills. Assuch they will have few opportunities to break the cycle of poverty, exclusion, anddeprivation. Eventually, insufficient investment in human capital translates into a low-productivity labor force, which would impede a country's prospects for socioeconomicgrowth and development.

THE OBJECTIVE, PURPOSE, AND AUDIENCE OF THIS STUDY

The objective of the study "Child Welfare Outcomes during the 1990s: The Caseof Russia" is to (i) review the situation and trends in terms of child welfare outcomes inRussia; (ii) review and evaluate social policy responses; (iii) identify major issues andchallenges; and (iv) propose policies and measures that would improve child well-beingoutcomes. The study provides an input into building the knowledge base on poverty andvulnerability in Russia. To a large extent the study focuses on child poverty andvulnerability and related social protection policies. While the study reviews child welfareoutcomes in the areas of health, education, and nutrition as well, it does not discuss

'A child is defined as an individual who is 0-18 years of age Children make up 23 3 percent of the Russianpopulation

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extensively sector issues and policies in these areas. They may be addressed in futuresector-specific analytical work.

The study relates to the World Bank Russia Country Assistance Strategy (CAS)objective to improve the Bank's knowledge base on poverty and vulnerability in Russia"as a pre-requisite for sharpening our strategic focus on poverty reduction." It also relatesto the Russian Government's development program, which recognizes the need for socialdevelopment, social protection, and poverty reduction and seeks ways to prevent socialexclusion of the most vulnerable groups of the population. The Program points out that"investment in human capital is an undisputable social policy priority."

The targeted audience includes the World Bank, policy makers and social care andservices providers at all government levels in Russia; the local research and academiccommunity; as well as donors and local and intemational NGOs involved in child welfarein Russia.

THE STRUCTURE OF THE STUDY

The study consists of two parts. The first part begins with a review of childwelfare outcomes during the 1990s, focusing on child poverty and vulnerability, as well ashealth, education, and nutrition status (Chapter 1). Chapter 2 links child well-beingoutcomes to the protracted economic crisis and related labor market developments, highinequality, rapid demographic and family fomnation changes, as well as generallyinsufficient, severely fiscally constrained and ineffective policy responses. Chapter 3looks more thoroughly at public policy responses in social protection, health andeducation, focusing in particular on safety nets: general as well as specific policiestargeting families and children. It reviews existing programs; assesses their adequacy androle as risk reduction, risk mitigation, and risk coping tools; and discusses the policy-making environment and implementation arrangements with emphasis on decentralization.It identifies major issues, constraints, challenges, and opportunities, and proposes furtherreform strategies and policies.

The second part of the study focuses on two groups of children identified asparticularly vulnerable in Russia: children deprived of birth family upbringing andchildren with disabilities. The chapter on the former highlights their growing numbersagainst a continued decline in the child population, as well as the continued practice ofcostly, detrimental to child development and ineffective long -tern institutionalization ofsuch children. It reviews legal and institutional reforms undertaken so far and identifieschallenges related to the design and effective implementation of the reform. It thenanalyzes the current public system, which provides care and protection for such children-its institutions, organization, decision-making process, its practices, human resources, andfinancial flows-and identifies incentives and factors that determine child care choices.Finally, it suggests steps for reducing institutionalization and moving toward cost-effective, child-focused, family- and community-based care for children deprived of birthfamily upbringing. This chapter also reviews the involvement of the private andnongovernmental sectors in child welfare, as well as regional experiences in child welfarereform. The chapter on children with disabilities reviews the trends in child disability,social protection policy responses, and issues related to the education of such children and

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outlines strategies and policies for better, cost-effective outcomes for children withdisabilities.

CHILD WELFARE IN RUSSIA DURING THE TRANSITION: THE SITUATION AND TRENDS

Child welfare in Russia deteriorated significantly during the 1990s.2 Russianchildren face an increased risk of being poor, particularly if they have multi-children orsingle parent families. Their health and nutrition status has worsened. Quality educationand access to it show signs of deterioration as well, with market relevance of educationbecoming one of the major challenges for the education system. Children face higher riskof being deprived of birth family upbringing and placed in an institution; being neglected,homeless, abused; becoming an alcoholic; or committing a crime.

(i) Poverty

Over the 1990s, the Russian economy experienced a steady decline in output andincomes, and a consequent sharp increase in poverty. Families with children have beenparticularly hard hit-it is estimated that every other child in Russia was poor during thelate 1 990s. Children in Russia face higher risk of poverty and extreme poverty relative tothe population as a whole (Figure 1): (i) the poverty rate increases with the number ofchildren in the household; (ii) single-parent families with children, particularly those withmany children and relatives, have the highest poverty rates in the country (Figure 2); and(iii) children form a significant group of poor in Russia. Single-parent and multi-childfamilies are also over-represented among the extremely poor as well as among thechronically poor.

The Russian economy has been growing since 1999. As a result, according to thelatest estimates, poverty rates have decreased. However, rates remain high, especiallyamong families with children, as children continue to face much higher poverty risk thanother population groups.3

Regional poverty4 studies and research work in Russia indicate that children inpoor families also tend to fare worse in terms of their health and their nutritional andeducational status, increasing their risk of chronic poverty. Alleviating poverty amongchildren is therefore an important element of Russia's goal of alleviating poverty for thecountry as a whole.

2 In an attempt to summarize shifts in living standards in 27 countries in transition in the Europe and CentralAsia Region during the 1990s, the latest UNICEF Regional Monitoring Report compares the 1999 to 1989changes in 20 indicators that reflect different aspects of well-being, including incomes, health, education,and child protection. With 5 improved indicators out of 20, Russia together with Ukraine and Belarus is atthe bottom of the list. The counties at the top of the list-with the highest percentage share ofimprovements-are Poland (74 percent), Croatia (72 percent), and Hungary (70 percent). See UNICEF(2001, pp. 9-13).3 Goskomstat, 2002; University of North Caroline, 2002.4 World Bank, 2000; UNICEF, 2001.

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Figure 1: Relative poverty and extreme poverty riskfor children under 16in Russia 1998-2000 (over the poverty and the

extrerne poverty riskfor the population as a whole, respectively)

Relative extreme poverty risk

Relatve poverty rnsk2 3

I ............ . .. .. .. . . . .. . .. . . . . . .. . . .. . . .. -

0.7 Ql I Q2 I Q3 4 9Q I Q, I Q, I Q4 I Ql I Q9 I Q3 I Q.

99 i9 2I

Source: Goskomstat Rossii.

Figure 2: Poverty rates for households in Russia in the third quarter of 2000

All households 31.1

Urban _ 2 29.3

Rural 36.1

Couple/ no children _ | 16.6

Couple/ 1-2 children _ 339.9

Couple/ 3+ children 66.3

Single parent/ 1-2 children 43.3

Single parent/ 3+ children 99.2

Smgle HH (working age) _ 10.2

Single HH (non-working age) =8.7

Source: Goskomstat Rossii. Note: HH stands for household.

(ii) Health and nutrition

Most of the health status indicators for the population in general, as well as thehealth status of women and children, have either deteriorated or stagnated over the 1990s(see Table 1 for data on disease prevalence among children), reflecting the impact of anumber of factors-including unfavorable lifestyle changes, environmental degradation,lax sanitation and hygiene, poor nutrition, increased economic and social insecurity anduncertainty and related stress and depression, and deterioration of the health care sector.Access to health services has deteriorated as well, particularly in rural areas and poorregions-location and ability to pay have come to play an increasingly important role inaccess to health care.

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Table 1. Disease prevalence among children in Russia 1994-2000

Newboms (per ten Children 0-14 (per hundred Children 15-17 (per hundredthousand live births) thousand relevant population) thousand relevant population)

1994 l 2000 1994 l 2000 1994 l 20003,450 1 5,491 139,970 182,980 105,680 151,140

Increase: 59% Increase: 30.7% Increase: 42%Source: MOH (2001).

According to the official statistics, some of the health status indicators improved atthe end of the 1990s. As a result, infant mortality, under-five mortality, and vaccinationrates for young children were slightly better than in 1990. For instance, in 1999, infantmortality rate was 16.9 per thousand live births, versus 17.4 in 1990, while under-fivemortality rates were 21.5 and 22.3 per thousand live births, respectively. Similarly, theabortion rate has declined, as well as matemal mortality rate, although it is still one of thehighest among the transition economies (39.7 per hundred thousand live births in 2000).Despite the improvements, the indicators remain at unsatisfactory level (see Figure 3 forunder-five mortality) and it is likely that poor children have drawn little benefit fromimprovements that have occurred-leading causes of under-five mortality often arepoverty-related, that is pre-natal conditions reflecting poor nutrition of mothers andinadequate conditions during childbirth; likewise, increases in the incidence andprevalence of childhood diseases reflect underlying poverty and poor nutrition.

Figure 3: Under-five mortality rates in the Europe and Central Asia Region 1999

Turkmenistan 45.9Kyrgyzstan 35 5Uzbekistan 32.9Azerbaijan 31.7

Kazakhstan 26 8Moldova 23 9Romania 22 6

Russia 21.5Georgia 19.5

Armenia 9.2Ukraine 174

FRY Macedonia r 6Bulgaria _ 5 1Belarus 148Latvia 6

Estonia _ 1 2 4Bosnia- 11 .4

Lithuania 11.2Poland _1.5

Hungary 1002Slovak Republic 10.1

Croatia in W.2Czech Republic

Slovenia 5 6

Source: UNICEF, MONEE Project Data Base.Note: Rates are per thousand live births.

Nutrition-in terms of energy, vitamins, and micronutrients intake-has worsenedas well, particularly among the poor. A particularly worrying trend is iodine deficiency

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due to low consumption of iodized salt, which, according to UNICEF, is estimated atabout one-fourth of total salt consumption (before 1990, all salt was iodized).

(iii) Education

Available data indicate that there still is broad access to education in Russia,although the enrollment rates estimates vary depending on the data source. The estimatesbased on the 1998 RLMS (Table 2) data set indicate that 76.6 percent of children 3-6 yearsof age were enrolled in pre-school education. Also, 97.8 percent of children 7-15 years ofage and 81.7 percent of children 16-17 years of age were enrolled in education (bothgeneral and vocational). However, while access to education remains broad, its qualityappears to be deteriorating, as a paucity of resources constrains access to teachingmaterials, including modem textbooks, and teaching methods fall short of requirements forthe post-transition economy. Market relevance of education and in particular vocationaleducation has become one of the most important issues. These may in particular be thecase in rural and poorer areas, where local resources are scarce, and thus affect childrenfrom poor families more than other children.

Table 2: Education enrollment in Russia by age cohorts (inpercent of each cohort respectively)

Age cohort 3-6 76.6Age cohort 7-10 96.9Age cohort 11-15 98.7Age cohort 7-15 97.8Age cohort 16-17 81.7Age cohort 18-24 24.1Source: RLMS (Round 8). Explanation: For the cohort 3-6 yearsof age the enrollment rate refers to pre-school education. For thecohort 7-10 years of age it refers to primary education only, thusexcluding those who still may be enrolled in pre-school education.This explains lower enrollment rate for the 7-10 years age cohort incomparison to the 11-15 years age cohort.

(iv) Deprivation offamily upbringing, and neglect, abuse and homelessness

Dramatic economic and social changes experienced by Russia during the 1990shave also placed considerable stress on families and children. As a result, in addition tosystemic risks, Russian children also face a number of increased idiosyncratic risks suchas becoming an orphan; being deprived of family upbringing, neglected, abused orbecoming homeless.

Deprivation of birth parental care. Over the last 10 years the number of childrendeprived of birth parental care in Russia increased by 40.3 percent, reaching 663,000 oralmost 2 percent of the child population in 2000 (Figure 4). The numbers also have beenincreasing on an annual basis: 2.5 times more children were deprived of parental care inthe year 2000 than in the year 1990. Most of these children are social orphans (with atleast one parent alive). The increase has happened against a sharp drop in the birth rateand consequent decline in the general child population in Russia.

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Institutionalization-Deprivation of family upbringing. In 2000, approximately400,000 Russian children were placed in residential institutions, because of deprivation ofbirth parental care (about 180,000 children), disability or poverty (approximately 220,000children).5 The annual cost of their institutionalization is estimated at US$ 720 million.

Although most of the children deprived of birth parental care are placed in a familyenvironment-adopted, placed with relatives (under a guardianship or trusteeship), orcared for by foster families-some 27 percent are institutionalized. Moreover, over thedecade, the share of residential care in the annual placement of children deprived of birthparental care has been steadily growing, and in 2000, some 29 percent of new placementswere in residential institutions (versus 22.5 percent in 1990; see Figure 4). In addition,another 8.6 percent were in temporary shelters waiting to be placed (in 1990, there wereno new entrants waiting to be placed into care).

In addition to children deprived of birth parental care, children with disabilities(particularly mental disabilities) and children from poor and dysfunctional families face anincreased risk of being placed in residential care facilities.

Institutionalization has been empirically found detrimental not only to the child'sdevelopment, but also to his or her ability to adjust successfully to life afterinstitutionalization.

Family violence and abuse. Anecdotal evidence suggests frequent occurrence ofviolence, abuse, and neglect, particularly in families in which one or both parents arealcoholics. A recent survey conducted in several regions among the school administratorsconfirms these observations: 72.9 percent of surveyed administrators reported that theyhad to undertake measures to protect children against parental neglect; and 32.2 percentreported cases in which they had to protect children against physical abuse by theirparents.

Neglect and homelessness. This is an issue of major public concern in Russia.Neglected (beznadzornie) and homeless (bezprizornie) children are children who live orspend most of their time in the streets. Their composition (Who are they and where dothey come from?) and number is controversial, with estimates ranging from 100,000-200,000 children to as high as 2.5 to 4 million children. However, there is no evidence thatsupports the higher estimates. Estimates based on the Ministry of Interior data indicate thatthe number of Russian children living (homeless) or spending most of their lives in thestreets for various reasons (family abuse and violence mostly because of alcoholism, work,run-way children, school drop-outs, lack of parental supervision, commercial and sexualexploitation, children from other CIS countries, and similar) could be somewhere between100,000-150,000. However, the reliable estimate is unavailable.

Figure 4: Children deprzved of birth parental care in Russia and their placement 1990-2000

5Children placed in general education boarding schools, often because of poverty or family dysfunction, aswell as children in temporary shelters (priyomniki) are excluded

Child Welfare Outcomes during the 1990s. The Case of Russia-Executive Summary

Children deprived of parental care (in Children in residential care (in thousands)thousands)

26 70/

142.1 ~~~180.0

1990 ~~~~ ~ ~~~~~~~~1990 20

Children deprived of parental care per Children deprived of parental carehundred thousand child population annually (in thousands)

1990 2000 1990 2000

Children Ilstisuonallzed annually as % ofhdren deprived of parental care children entering pubic careInstitudonalkzed annually

(n thousands)

30.70%o

36.2 ~ ~ ~ ~ ~ 22529.4

1990 2000 1990 2000

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Child Welfare Outcomes during the 1990s: The Case ofRussia-Executive Summary

FACTORS AFFECTING CHILD WELFARE IN THE 1990S

The following groups of factors have played the .most important role indetermining the children's well-being in Russia during the 1990s: (i) declined output andassociated negative labor market developments (ii) rapid demographic and familyformation changes; and (iii) inadequate social policy.

Economic developments. The level of income and its distribution are keydeterminants of the well-being of the population. Over the 1990s, Russia experienced asimultaneous decline in real income and a sharp rise in inequality. In 2000, real GDP wasat 65.7 percent of its 1990 level. In comparison to other transitional economies, Russiawas amongst the countries with the lowest GDP in the year 2000 as compared to the 1990index (Figure 5). At the same time, income inequality in Russia is high compared to mostof other countries in the region (the Gini coefficient for distribution of income estimatesvary between 0.374 and 0.461).

Figure 5: Real GDP in 2000 in comparison to 1990

Poland _ _ 14320

Slovena 120 09Alban.a _ I I L 2 0i

Hungiy 107 99

Slovak Republic =05 08Czech Republic 99,91

Uzbekistan f95.74FYR Macedonia 9 LOO

Belarus 88 67

Croatia 86I~ 683Estomna Ir86.06

RomaE=a 82 89

Bulgana _ 82 06

Turk enistan _ 7 5 9 5

Kazakbsta _ 6 9,3 630Lithuania 68.36

Armenia _ 67.89Kyrgyzstan 66.34

Russia 65 73Latvra 62.30

Ukraine 43.41Tajikistan 38 09

M oldova 35.28Georg6a 2 2 76

Source: The World Bank World Development Indicators Data BaseNote' GDP in constant local currency units; index.

Owing to high unemployment (10.4 percent in 2000) and a sharp drop in realwages, real household income plummeted-in 2000 it was only 35.8 percent of its 1990level. Although wages have increased recently as a result of economic growth, they stillremain low. In addition to the decline in wages, workers have been subject to wagearrears through most of the 1990s. According to 1998 RLMS survey data, 59 percent ofthe employed were experiencing wage arrears. These labor market developments, byaffecting the economic status of parents, have had a major impact on child poverty:parents are generally of working age and likely to be in the labor market.

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Demographic and social changes. The structure of the Russian families has beenchanging rapidly with sharply increased mortality rates among the working agepopulation, a persistently high divorce rate, and a growing number of'births to unwedmothers-all of which contribute to the growing prevalence of single parenthood andhinder the ability of many families to care for their children. Single-parent families inRussia are empirically found to be worse-off than complete (two parent) families. Ashock such as parental death or divorce, in addition to psychological and emotional stressand deprivation, and in the absence of adequate public support, means less income for afamily and may result in the material deprivation of children through increased povertyand vulnerability.

Social policy responses. As living standards declined and poverty andunemployment increased, the public programs in health, education, and social protectionwere unable-owing to lack of resources, and limited and ineffectively implementedreforms-to address the health problems of the population, provide marketable skillsthrough the education system, and target social protection services and benefits to apopulation that was greatly in need. The rapid decentralization of social expenditureprograms has in many cases left regional and local authorities unable to cope with theirnew responsibilities in social protection, health, and education, either financially oradministratively. In addition, the collaboration among the main child care and protectionactors-organizations providing health care, education, and social protection-has beenweak, failing to provide cohesive safety net and the range and continuum of care thatwould ensure the harmonious development of the child.

SOCIAL RISK MANAGEMENT POLICIES OVER THE 1990S

The safety nets. During the 1990s, the role of social protection in assisting Russianhouseholds in managing risk-that is, to reduce it, mitigate its effects, and cope with itwhen it materialized-was limited. It consisted of numerous, largely insignificantprivileges, subsidies, and in-kind and cash benefits granted by federal, regional, and localauthorities. The programs mostly lacked poverty and vulnerability focus. The systemoveremphasized merit-based subsidies and privileges favoring the better-off population.. Ithas excessively relied on expensive and ineffective forms of risk-coping mechanisms(such as the institutionalization of vulnerable individuals) at the expense of more desirableand cost-effective risk reduction and mitigation interventions (such as social work andcare services, as well as family-centered, community-based risk-coping programs). Thesystem was overwhelmed with shortage of resources at all levels, reflected innonperformance and arrears. This not only undermined the potential impact of the safetynet, but also compromised efforts to reform it. Important changes introduced during thedecade have failed to produce the expected outcomes. Necessary institutions are not inplace, administration remains ineffective, resources are insufficient, and there continues tobe significant resistance to abolishing many outdated privileges and subsidies.

Family and child welfare policies. Since the beginning of the 1 990s, the family andchild welfare system has undergone some important changes.

(a) The legal and institutional framework has been revised. A new FamilyCode was introduced in 1995, and it serves as the centerpiece for a new rights-based, family- and child-centered approach to family and child -welfare. Itreflects the UN Convention on the Rights of the Child and other UN documents

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on family and child well-being, giving clear priority to family based care ofvulnerable children and development of preventive, community based socialwork and care services. Extensive changes have been introduced in legal andregulatory acts at federal, regional, and local levels, and further changes continueto be introduced, as family legislation is being brought up to standard, and thefamily and child welfare system adapts to new realities on the ground.

(b) The family and child welfare system has been decentralized, withframework legislation and general policy development undertaken at the federallevel, while responsibility for detailed legislation and accompanying regulation,implementation oversight and service provision, including financing, has beenassigned to regional and local governments.

(c) Preventive social welfare policies for families and children have beenintroduced, including a limited targeted poverty benefit, and community-basedsocial work and care services for children and families at risk.

The changes that have taken place over the last 10 years have established a goodfoundation for the development of a rights-based, child- and family-centered, efficient,and effective family and child welfare system.

However, while new policies have set a sound framework for improving familyand child welfare and as a consequence new initiatives and programs have been introducedin numerous municipalities across Russia, their introduction have not had a nationwideimpact on the family and child welfare. Instead, paradoxically, there has been a continuedincrease in the number of children at risk, particularly those deprived of a birth familyupbringing. Moreover, the number of such children placed in costly, ineffective residentialinstitutions has increased by 26.7 percent over the 1990s, reaching 180,000 children in2000. The number of children deprived of birth parental care institutionalized annuallytripled: while in 1990 11,000 such children were placed in residential care, in 2000 theirnumber was 36,200.

To a certain degree, these trends reflect the harsher economic climate and theabove-mentioned (demographic) changes in family structures, which have accentuated theneed to provide care for growing numbers of children deprived of birth parental care, aswell as insufficient availability of family-based placement alternatives, as economichardship has reduced the number of families able and willing to take on children deprivedof parental care. However, more importantly, it reflects systemic issues: (i) lack of acomprehensive strategy to implement the new national child-centered policy, with de-institutionalization as an explicit goal; (b) insufficient focus on promoting, developing,and supporting preventive, community based social work and care services, as well asfamily-type substitute care arrangements; (c) too rapid decentralization of policyimplementation in view of limited administrative capacities and resources, includingfinancial resources at subnational levels; (d) ineffective implementation of nationalpolicies at the regional and local levels; (e) functional fragmentation of the system, withthree ministries (Ministry of Health, Ministry of Education, and Ministry of Labor andSocial Development) responsible for various segments of child welfare, resulting ininconsistent and uncoordinated approaches; (f) unclear accountability, inadequate andoutdated principles and methods of case management and decision making in assistingvulnerable individuals, coupled by lack of monitoring and evaluation; and, possibly,

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Child Welfare Outcomes during the 1990s The Case of Russia-Executive Summary

vested interests that support maintaining an important role for institutionalization-residential institutions often are significant employers in their communities.

Protection of children with disabilities. While there was a gradual shift from themedical model toward a more functional approach to disability during the 1990s, there isstill a significant need for further change. The assessment system still condemns too manychildren to lifelong institutionalization in residential facilities for the disabled. Social careand rehabilitation services for children with disabilities and support services for theirfamilies-aiming to foster integration of children with disabilities into the community andenable families to take care of such children-have been introduced, but very slowly.Access to such services remains severely limited and varies from region to region as afunction of regional and local fiscal capacities. Moreover, an elaborate system of cash andin-kind benefits was introduced for children officially certified as "disabled." Still,although benefits to families are numerous in principle, little such assistance reaches them,and when it does, it is insufficient.

Policy making and implementation environment. The management and financingof health services, basic education and safety nets, including family and child welfare, aredecentralized in Russia to regional and local levels. Child allowances are financed fromthe federal budget. The federal government sets the general legal and institutionalframework and general policy directions, and provides methodological guidelines andinstructions.

There are large differences among Russian regions in administrative, human, andfinancial resources. Thus, while some regions have covered the entire population withsocial work and care services, many have barely started introducing them. A few regionspay a regular poverty benefit in cash, while most cannot afford even occasional assistancein kind. Inter- as well as intraregional inequities in access to education, health, and socialassistance and services have become pronounced. Federal and regional transfersmechanisms have not been able to ensure equity in providing access for citizensthroughout Russia to public services and minimum social guarantees. Hence, location isturning into one of the most important determinants of access to human capital formation.

Mechanisms to ensure that national policies and strategies are correctly interpretedand implemented at subnational levels are lacking. Consequently, the policy and strategyintentions are diluted, the more so as one goes down administrative levels.

TOWARD COST-EFFECTIVE AND AFFORDABLE FAMILY AND CHILD WELFARE POLICIES

While the Government is pursuing more child- and family-centered policies,defined in the legal and institutional framework adopted in the mid 1990s, the process isimpeded by systemic constraints that could be anticipated and better addressed through anationalfamily and child welfare reform strategy. Such a strategy would set out its mainpolicy objectives as follows: safeguarding the family, providing family settings forchildren at risk, and reducing and eventually eliminating the role of institutions in the careof vulnerable children. Accordingly, it would comprise a plan for decreasing the numberof families and children at risks and reducing the number of children in need of substitutecare, as well as increasing family placement of such children, including the plan fortransforming and closing down of institutions, with an appropriate staff redeployment

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plan. It would spell out the measures needed to bring this about: promoting a healthyenvironment and safeguarding maternal and child health care; ensuring adequate basiceducation; strengthening social risk management programs by means of increasing andimproving income support to poor families with children, such as child allowances andtargeted cash benefits; expanding social work and care services; and strengthening family-type placement of children at risk. The strategy would delineate functional andadministrative responsibilities, and it would be designed and developed with carefulattention to implementation capacity and financial resource availability. The strategyshould be accompanied by an action plan, with the time frame, targets and benchmarks.

Preventive policies. One of the most important priorities in reforming the familyand child welfare system is development and strengthening of preventive policies-policies aiming at preserving, supporting and strengthening the capacity of the families totake care of their children. Preventive policies comprise two major groups of programs:social work and care services and cash benefits.

Social work and care services include programs such as psychosocial counselingand work with dysfunctional families and children with disturbed behavior, legalcounseling, shelters for temporary placement of families and children,rehabilitation services to children with disabilities and assistance to their families,respite care services, etc. They are provided by the centers for social work and carecenters that were introduced in Russia in 1993. The centers currently coverapproximately 20 percent of needs, with huge regional variations. Centers areoverloaded and often lack programmatic focus. A much needed rapid expansion ofthe system and its administrative, functional, organizational, professional andfinancial strengthening may be severely constrained by limited availability offinancial resources, administrative capacity, and adequately educated and trainedstaff. These constraints could at least partially be overcome by developingpartnerships with nongovernmental organizations. Already, the NGO sector playsan important role in promoting and protecting children's rights and interests. Byraising awareness and advocacy for child welfare reform and in particular de-institutionalization, NGOs can significantly contribute to building public supportand constituency for reform, and resource-constrained public authorities shouldmake use of this capacity to further the child welfare agenda. Moreover, privatenonprofit and non-governmental organizations can provide social welfare serviceson its own, or can be contracted out by the public authorities to provide them.Currently, the non-profit, non-governmental provision of social welfare services isat an early stage of development in Russia and operates in a highly unregulatedenvironment. Regulation has to be introduced that strikes an appropriate balancebetween safeguarding families and children at risk and allowing nongovernmentalorganizations sufficient freedom to operate, often as proving grounds for new andinnovative approaches to care.

Targeted cash benefits. Targeted cash benefits can play an important role instrengthening the capacity of poor and vulnerable families to take care of theirchildren and preventing family dysfunction and disintegration. Among those, thechild allowance is one that potentially can play an important income-supportingrole in Russia. To that end, its level needs to be increased (minimally, anadjustment for inflation since 1998 should be made) and then preserved in realterms. More generally, the administration of benefit programs, including in

17


particular their targeting, needs to become more rigorous. The numerousindividually insignificant privileges, subsidies, and in-kind and cash benefitsgranted by regional and local authorities should be consolidated into one (regional)targeted cash poverty benefit for families.

Systematic efforts at family-type placement will have a decisive impact onreversing the flow of children into long-term institutional care. This will require morerapid development of counseling services and support, including regular income support,to families at risk to decrease demand for placement of children in substitute care. It willalso require active advocacy for adoption, guardianship, and foster care and betterdatabases on available children and potential families. Family-type placement should alsobe encouraged by reducing the length and complexity of the placement process,particularly for adoption; and reducing and eliminating delays in the payment of benefitsand remuneration to substitute families. The placement decision making process, and itsorganization and implementation arrangements (the so called "gate-keeping") needs to berevisited and substantially improved through the introduction of case management-individual care plan-principles and practice and mandatory annual review of placementdecisions, clear guidelines giving a strict priority to family placement, regular monitoringand evaluation, clear division of roles and responsibilities and accountability for the policyimplementation its outcomes. Awareness-raising and advocacy for child welfare reformand in particular de-institutionalization, can significantly influence public attitudes,contribute to building public support, and create a constituency for reform.

De-institutionalization. If one of the outcomes sought by the reform is increasednumbers of children in family-based care, a central and explicit element of the reformstrategy should be de-institutionalization. Therefore, in addition to the efforts to decreaseentry into care and increase and strengthen family-based placement for children who entercare as discussed above, successful de-institutionalization requires efforts to increase exitfrom institutions and their closing down or transformation into family support centers. Tothat end the following is needed: (i) mandatory annual review of placement decisions; (ii)actions to provide family based care (birth or substitute) at least for some childrencurrently in residential care; (iii) explicit strategies for closing down or transformingresidential care facilities; and (iv) strategies and policies for the redeployment of staff ofresidential institutions. The experience with the patron families shows that it is feasible tomove children out of residential care. Once thoroughly evaluated and accordinglyadjusted, the patron.families arrangement could gradually be scaled up, provided thatarrangements and institutions required for its successful implementation are put in place.Also, a mandatory review of currently institutionalized children should be carried out, inorder to assess the prospects of such children being placed in a substitute family setting orreunited with their birth family. The review should result in a care plan for each childcurrently placed in residential care facilities for children deprived of birth parental care(including children placed for poverty or other similar reasons). The best interest of thechild should be the only criterion in the drawing of individual care plans and subsequentdecision making.

Improving service provision. Notwithstanding notable efforts to build publicservice capacity, particularly in newly opened social work and care centers, child careservices, especially in residential care facilities, are in need of substantial improvements:(i) physical plant is in need of repair; (ii) equipment needs to be modernized; (iii) care thatincludes the mental and social well-being of the child needs to be introduced in order to

18


balance the current focus on physical well-being; and (iv) staff is in need of renewal andupgrading of knowledge and skills.

Protection of children with disabilities. The following specific measures toimprove the well-being of children with disabilities are recommended:

(a) A better balance needs to be attained between medical and functionalcriteria in determining disability. This should not only help reduce the numbers ofchildren with disabilities, but would, through increased emphasis on integratingthem into the community, reinforce policies that aim at de-institutionalization andrehabilitation in child care.

(b) A national strategy incorporating prevention of disability, its earlydetection and rehabilitation, and the conscious integration of individuals withdisabilities into society needs to be developed with an action plan for itsimplementation.

(c) In line with the shift toward a greater emphasis on the functionaldefinition of disability, procedures guiding the disability assessment should berevised and evaluation methods and techniques improved toward a more balancedconsideration of both medical and functional factors in determining disability.Also, an independent appeals process relating to decisions by the commissionsshould be put in place.

(d) Reduced dependence on special education facilities for individuals withdisabilities should be an explicit element of policy, and it should include strategiesthat create opportunities for them to participate in mainstream education; likewise,systematic monitoring and evaluation of the quality and relevance of educationprovided to children with disabilities should be undertaken, and it should feed intoa decision-making process aimed at improving their education.

(e) Socioeconomic data on families of children with disabilities should begenerated to advise policy, including the provision of benefits to allow for morecost-effective targeting.

(f) Awareness-raising about disability should be a priority among public officials, parents,nongovernmental and community organizations, and the general public to help remove thestigma that often accompanies the state of having a disability.

Redefinition offunctional responsibilities. The division of functional responsibilityfor family and child welfare among three ministries results in inconsistencies andinefficiency in the application of strategies and policies, as well causing duplication oftasks. Most important, it appears to inhibit the development of a comprehensive andcoordinated strategy for implementing the principles and policies introduced in the mid1990s, that is for moving toward a family- and child-centered welfare system. To reachthis goal, consistency among the three ministries-in their approach to strategy and thedelineation of strategic responsibilities-is imperative as is systematic communication,especially in major strategic areas. Formal interministerial arrangements should beconsidered to drive the shaping of strategy, its full harmonization and consistency andserve as a focal point for reform.

In the immediate future, at the administrative level, consideration should be givento the establishment of a family and child welfare coordinating body that would serve as a

19


clearinghouse for policy formation and implementation-ensuring that policy fomnulationis administratively feasible, is being implemented in accordance with existing laws andregulations, and feeds the impact of policy implementation back into the policyformulation process. This is particularly important at the regional and local govermmentslevel. For the medium to longer term, consolidation of functional responsibilities underone government agency, as is the case in other developed countries, should be considered.

Consolidation of the decentralization process. Mechanisms to ensure that nationalstrategies and policies are correctly interpreted and implemented at subnational levels needto developed and effectively implemented. In order to address large regional disparities inaccess to and in the quality of social services and benefits, the current equalizationmechanism needs to be evaluated and accordingly made more effective.

Improving efficiency. Strategies need to be developed that optimize the use ofresources for family and child care by prioritizing only the most cost-effectiveinterventions-in other words, those services that make it most likely that children willstay with their families, be retumed to families, or placed in family-like environments.Also, administrative procedure needs to be adapted to better serve prevention, family andfamily-like placement, and benefit targeting strategies. To achieve this goal, staffing andstaff skills need reconsideration; information on children at risk and children deprived ofparental care, as well as on those on assistance and service provision needs to bedeveloped; management information systems need upgrading; monitoring and evaluationmechanisms need to be introduced to inform decision making and programimplementation; key decision making agents, such as guardianship authorities that placechildren into substitute care or the medico-psycho-pedagogical commissions that evaluatechildren's fitness for regular education and place children into special education need torenew and improve guidelines and methods and techniques they apply; principles andmethods of case management in assisting vulnerable individuals, as well as a mandatoryannual review of placement of children in substitute care arrangements, need to beintroduced.

Strengthening the database. Data on family and child welfare are currentlydispersed and inconsistent. Such data are inadequate for policy analysis and policy-making purposes. Data needed for performance monitoring and impact assessment-inother words, data that would allow policy makers, managers, and administrators toconsider whether to expand, curtail, or alter the design of existing strategies, policies, andprograms-are not collected. Successful implementation of strategic objectives willrequire the determination of indicators necessary at each level of the system, and theidentification of appropriate data that need to be collected.

Systemic planning and program implementation should be developed and designedwith careful attention to financial resource availability. So far resources have failed tokeep pace with new initiatives, reflecting weaknesses in allocation mechanisms, inplanning and budgeting processes, and in part, a general shortage of financial resources inthe system. To the extent that there may be only limited opportunities to channeladditional resources to family and child welfare, available resources will need to be usedmore efficiently. This means consolidating or eliminating some of the entitlements andbenefits and targeting remaining benefits at needy families better; it also means the activeconsolidation, downsizing, and elimination of residential institutions and the reallocationof released resources to preventive, community and family-type care. It further means that

20


consideration has to be given to the contracting of some services to nongovernmentalorganizations and other outside entities.

More generally, it is unlikely that a more efficient system of care for children atrisk will generate substantial financial or budget savings in the short to medium term.This will require changes in the socioeconomic environment that come with equitablegrowth, which in tum will reduce pressures on the child welfare system. In the meantime,preventive measures and community and family support mechanisms are the most cost-effective approaches, both in financial terms and in terms of longer-term social returns toinvesting in children at risk now.

Health and nutrition. In health care, measures should focus on (i) improvinghealth status through incentives and educational programs aimed at changing lifestyles,reducing or preventing environmental damage and occupational hazards (and they shouldtarget the poor and less educated); (ii) strengthening preventive health services forpregnant women and children; immunizations and programs for controlling infectiousdiseases; and education and services for women and their babies; and (iii) developingcurative health services that focus on early childhood diseases. In nutrition, all salt shouldbe iodized to eliminate iodine deficiency and wheat should be fortified with iron toeliminate iron deficiency-related anemia.

In education, the focus should be on maintaining broad access to basic educationand ensuring its high quality and market relevance by guaranteeing adequate publicfinancing for education inputs and protecting poor regions against inequitable financingarising out of decentralization.

POTENTIAL FINANCIAL IMPACT OF THE REFORM

While there are no adequate national level data on expenditures on childrendeprived of parental care, estimates indicate that ineffective institutionalization ofvulnerable children "locks in" significant amount of public resources. It is estimate that in1999 the cost of residential care for children deprived of parental care and children withdisabilities-approximately 380,000 children-absorbed some 0.45 percent of GDP;excluding children with disabilities puts the cost at 0.21 percent of GDP; see Table 2 in theAnnex. In comparison, in 1999, expenditures on child allowances covering about 32million children made 0.32 percent of GDP. While monthly cost of residential care forone child was about 4,500 rubles (1999), annual public expenditures per child in generaleducation was 7,273 rubles (2000). At the same, time, the guardianship allowance (anallowance to guardian/trustee families taking care of the child deprived of parental care)was about 1,250 rubles per month-almost four times less than the cost of residential careper child.

Therefore, de-emphasizing the role of institutions in providing for childrendeprived of birth parental care, disabled and poor children in favor of family basedsubstitute care options, mainstream education for disabled children and preventivemeasures would generate significant savings. Such savings could be applied tostrengthening family-based care - the capacity of birth families to take care of theirchildren; enhancing family-based substitute care; and introducing and developing socialwork and care services. De-emphsizing institutions would also increase the likelihood of

21

Child Welfare Outcoines during the 1990s: The Case of Russia-Executive Summary

significant positive longer tern retums to society through better adaptation of the child toits environment.

BUILDING THE KNOWLEDGE BASE FOR POLICY MAKING: DATA AND RESEARCH AGENDA

Data. The data on which our analysis of child welfare is based are drawn fromofficial sources at the national level. Seemingly plentiful, the data is deficient when theintention is to measure progress toward expected outcomes and inforn the policy making.This is the case in all areas of child welfare. The informed policy making requires reliabledata that (a) allow the development of monitoring indicators and evaluation capacity thatcan measure the effects of policies, and (b) provide timely identification of problems andpoint to solutions, that is, allow policy makers and managers to consider whether toexpand, curtail, or alter the design of existing strategies, policies, and programs.Definition of indicators is often unclear, and collection and reporting practices could beimproved substantially. Frequent incompatibility between different data series createsadditional difficulties; this incompatibility arises from the functional division ofresponsibilities in the area of child welfare and different data needs of three ministries-Health, Education, and Labor and Social Development. Data shortcomings also reflectgenerally relatively moderate use of data for performance monitoring and evaluationpurposes beyond the monitoring of adherence to formal rules and instructions.

Therefore, in education, health and social protection alike, there is a need to assessthe reliability and usefulness of the currently collected indicators for policy making andaccordingly change the list of indicators, as well as take steps to improve their reliability.

Research. While statistical indicators provide information on general performanceof policies over time, policies impact evaluation and their consequent changes require in-depth research. For instance, understanding the impact of transition on different socio-economic groups of the population, including their health status, access to education,access to social services and the like would be extremely useful for better tailoring andtargeting of policies. Similarly, a longitudinal study on the well-being of children indifferent forms of substitute care, could contribute to the policy focus on the carearrangements that are most cost-effective.

22


ANNEX I

Table 1: A Summary of major social protection programs in Russia

-Programs - Efigibiity ,- - ' Benefit' Mainfudig :

: .souirce/Administration

Cash benefits

-Pension (labor) -', Women 55+, men 60+!I Monthly cash-bene fitr' Contributory. Federally mandated.people with disabiiities I PAYGO funded part (recentlyandsurvivors j introduced). Financed by the social

,.- .3" -, ,,, ,,;,,,+ ,, , , jtapaid to the.tax authority.. , . ,, " \ ' -- -IS 5v" -' ' ' ''-t''-. -- " IAdmrinistered by the Pension Fund at

all administrative levels.

Unemployment O cially registered. lo_nthlycashbenefit or a' 'Non-contributory. Federallybenefit' . -unemployed limited:period of time, - - mandated. Funded by the federal

ibudget. Admiinistered bytheEmployment Services administration.

.. , , , , . ,t5 .- ! . ; ';',i Ii' .'

Sick-leave | Employed, temporary Monthly casih benefit-for a -Contributory. Federally mandated.compensation incapable'of working limited periodof time ,:, Funded by a tax paid to the Social

Insurance Fund (SM). Administeredby enterprises.

,Social - N Women 60+, men 65+ Monthly casbenefit Non-contributory. FedemllypenŽsion '. ' ¢ . and people with mandated. Funded by the federal

.,' ' : . '.'disabilities (including budget. Administered by the Pension*>: .,j ~ ', ,' s those disabled sincej Fund and at all administrative levels.

childhood) ineligible forI labor pension and with no

other source of income;,orphans not eligible forsurvivor's pensidn, andchildren with disabilities i

. who are cerhfiied as"child invalids"

uos,ing Low-income households;. |' Monthily housing su,bsidy`-' Non-contributory. Federallyallowance 1 income tested 'i';r; ' mandated. Funded by local budgets.

* ,': ' -, '.', FL , ' Administered by local governments.

Child '- Children from low- iMtil,y cas Non-contributory. Federallyaliowance 'e .. income households . mandated. Funded by the federal

(income tested: per capita ' -. -- , '' budget. Administered by MLSD athousehold income below . all administrative levels.

-k' ,.t .regional subsistenceminimum)

Paymentto Pregnant women (early O time cash payment Non-ontributory.Federallyopregnant. pregnancy, upto 12 mandated. Funded by the SF for thewomen weeks of gestation) at 7 |employed and local governments for

i registration for prenatal -the unemployed. Administered bycare . enterprises and local social protection

- , -__. ' ' - -" :.-. -. . : ............ ., administration.

23

Child Welfare Outcomes during the 1990s. The Case of Russia-Executive Summary

Birth grant X Newbom children . One-time cash payment i 7Non cont'ributory. Federallymandated. Funded by the SIF for the

'- ~ ' ' -- C - '-. ' ' - ! employed and local governments for- the unemployed. Administered'by

', *, | w . ~ enterprises and the local social'; !_ *-. ' protection administration.

Maternity , Employed mothers before-' Monthly cash payment Contributory. Federally mandated.jeave !.and after delivery: 70 Funded by a tax paid to the SIF.

calendar days before and, Administered by enterprises.'70 (86 for complicated*) delivery, 110 for more -

. -='' '". - }than one child7 calendar l-.-,daysafter delivery

Child-care ; Mothers (employed and Monthly cash payment Non-contributory. Federallyallowance -unemployed) until a child mandated. Funded by the SIF for the

. is 18 months old - employed and local governments forthe unemployed. Administered byenterprises and local social protection

- ' i. ;r-- administration.

,Otheru-' Various categories of Various one-time and regular Non-contributory. Mandated at allbenefi,ts ' + ! individuals and families; icash and in-kind b,enefits and government levels. Funded and

*-merit or needs based; subsidies - .- , administered by regional and localoften based on-double govemments.eligibility requirements:categorical e

. income/means.test ,.

.'. + f.2 - r- - . 1--

Privileges and subsidies

TPrivileges '. Various categories of 'Discounted or free-bf-charge Non-contributory. Mandated andand subsidies individuals and families; t gobods'ihd services (for food ' adininistered at all government

o ,, : -. ; .lmerit or needs based -traisporfation,housin and levels. Funded by federal, regional,T utilities, recreation arid and local budget and non-budgetary

- - ~ < <g ¢ | 1 rehabilitation; medical finds and enterprises. Administered* -. -.services; preschbool and-- ' by local governments and

- - *dJ ef ' *' -training, and so on) '' - enterprises.

Services

Social work a Vulnerable children and I lCounseling services,'at-home ,i Non-contributory. Mandated at alland care - youth and their families; I services, rehabilitation, day' government levels. Funded byservices- < : adults and elderly ,care, tempprary shelters, regional and local governments.

psycho-soc5ial support, legal Administered by local governmentcounseling, and so on: administration.

sidential Children deprived of j Long-term.placement (m some Non-contributory. Mandated at all,institutions parental care, poor [;cases, lifelong) - - l govermnent levels. Funded by

children, children with - -- regional and local governments.disabilities; adults with - Administered by local governmentdisabilities and the administration.elderly; frail elderly. l'

Source Various legal and administrative documents.

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Table 2: Expenditure on social protection in Russia: An estimate for 1999Number of Expenditure | Share in % Share in

beneficiaries (Billion Rb) GDP total(millions) _ (%) expenditure

,,: - ..-. t ~.-. -.- :ICash,beneffrs- .____,-.(1) Pensions (labor, disability, and survivor's) 37 0 244 3 5.37 79.8(2) Unemployment benefit 7 5 0.16 2.4(3) Sick-leave compensation 19 6 0.43 6 4(4) Social pension' 1.4 5.5 0.12 1.8(5) Housing allowance' 7 9 1.96 0.04 0.6(6) Child allowance' 32.0 14.5 0.32 4.7(7) Birth grant I I 1.5 0.03 0 5(8) Matemity leave 0.8 2 4 0.05 0.8(9) Child care allowance 0.85 1.9 0 04 0 6(10) Other benefits4' 7 2 0.16 2.4

(11) Total 306.36 6.73 100.0(12) Total without labor pension 62.06 1.37 20.2(13) Total without labor pension and sick-leave 42.46 0.93 13.9

'-' ' -- '.' '-' 'r *.'''- X. - .- . '2. PrirwaeesPan subsidies ;--: 'i§.-?.' t -.

(14) Total - 32.8 32.3 0.71 r.. .- ' ,; K -~, :-. '.-' .'.- *. -., f-3.-SociAlvworkand'earesern,lee-s'-. :.. .-.- : , , ,

(15) Social work and care services for children6 3 8 0.08 8.6(16) Residential institutions for children' 0.38 20.5 0.45 46 2(17) Social care services for adults and elderly9 8 7 0.19 19.4(18) Residential institutions for adults and 0.21 11.3 0.25 25.5elderly' _ _ _ _ _ _ _

(19) Total 44.3 0.97 100

_ _A _Source: Compiled based on various tables from (1) Rossiiskii statisticheskli ezhegodnik 2000 and (2)Social 'noe polozhenie i uroven 'zhizni naselenia Rossii 2000. Goskomstat Moscow.

Notes 1. See Source (2), p 230, Table 5.23. 2. Housing allowance was received by 2 63 million families(6.5 percent of the total number of families). The number of individual recipients calculated based on theassumption that the average recipient family had 3 members; average calculated monthly subsidy per familywas 62 Rb. 3. In 1999, the estimated number of children eligible for child allowance was 32-33 millionThe mandated monthly benefit amount was 58.4 Rb; for children of a single parent, 116.9 Rb. The arrearsfor child allowances amounted to 11.5 billion Rb (only 20 percent lower than the amount paid to children).4. Includes payments to the victims of Chernobyl catastrophe, benefits to refugees and migrants, funeralassistance, cash social assistance, and so on. 5. The number of recipients and the amount of expendituresestimated based on the Goskomstat Household Survey data on decile shares of recipients and the averagemonetary value of the subsidies/privileges received. See Source (2), pp. 222-23, Tables 5.15 and 5.16. 6.Assuming that 73,000 employees received the national average net wage, that average labor taxationcoefficient was 1.45, and that labor cost made up one half of the total cost. 7. Estimated based on theassumption that there were about 380,000 institutionalized children depnved of birth parental care andchildren with disabilities in various institutions and that average monthly cost per child was 4,500 Rb. Thecost is normative; no information that would allow an estimate of actual spending is available. The estimatedoes not include children in general boarding schools and children institutionalized for poverty or familydysfunction. 8. Same as in the case of services for children; total number of employed estimated at 200,000.9 Same as in the case of residential institutions for children.

25


Table 3: Public exenitures on health in Russia 1991-991991 1992 1993 1994 1995 1996 1997 1998 1999

In % of GDPTotal 2.9 2.6 3.7 4.0 3 5 3.6 4 2 3.6 3.3Consolidated budget' 2.9 2.6 3.3 3.1 2.6 2.6 3.1 2.5 2.3Compulsory Medical n a. n.a. 0.4 0.9 0 9 1 0 1.1 1.1 10

Insurance Fund

Index 1991 = 100Total i 76.6 99.4 93.3 73.6 75.3 92.2 78.2 75 5

Source: Goskomstat, various publications. For consolidated budget expenditures 1992-94, see World Bank,Fiscal Management in the Russian Federation, 1996.Notes: 1. Includes public expenditure on sport.

Table 4: Consol dated public spending on education in Russia 1992-20001992 1993 1994 1995 1996 1997 1998 1999 2000

In % of GDPTotal 3.58 4.03 4.36 3.40 3.49 3.48 3.34 3.47 3.58

General 2 37 3 27 3.49 2.88 3.01 2.89 2.93 2.95 2.95Professional 1.21 0.76 0.87 0.52 0.48 0.59 0.41 0.52 0.63

Index: 1992 = 100Total 100 1 02 0.96 0.68 0.69 0.72 0.69 0.75

General 100 1.26 1.17 0.87 0.90 0.91 0.91 0 97Professional 100 0.57 0.57 0.31 0.36 0 36 0.25 0.33

Source MOE (2001a).

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